Business model innovation in the social entrepreneurship sector of South Africa

Abstract

Social enterprises play a vital role in addressing South Africa’s socio-economic challenges, yet many struggle with financial sustainability and scaling impact. Business Model Innovation (BMI) is a key enabler of growth, helping social enterprises develop sustainable revenue streams and adapt to changing conditions. However, limited research exists on BMI’s role in developing economies like South Africa. This study explores how BMI supports the scalability and sustainability of social enterprises in South Africa. Using a qualitative approach, semi-structured interviews were conducted with twelve social entrepreneurs across various provinces. Thematic analysis examined BMI implementation, key barriers, and external influences. Findings reveal that while social enterprises adopt BMI, many lack a structured approach. Challenges include financial constraints, limited funding access, regulatory barriers, and balancing social impact with financial sustainability. Successful enterprises leverage technology, strategic partnerships, and diversified funding models including impact investing, digital platforms, and hybrid revenue structures to overcome these barriers. This research bridges the gap between BMI theory and practice in a developing country context. It offers practical recommendations for social enterprises to adopt structured BMI frameworks, policymakers to create supportive regulations, and investors to develop tailored funding mechanisms. An enabling environment for BMI is crucial to fostering sustainable, high impact social enterprises in South Africa.